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29 July 2012

Maybe I'm just stupid, but it appears to me that in OHRIA's recent proposal, Plan For The Future, that in lieu of losing $165 Million a year in slot revenues that went towards purses and breeding, they want funds to be set up by the government (an actual subsidy) totalling $210 Million a year, while being alright with cutting race dates and racetracks. Um OK, I must be idiotic in believing that the government will laugh their heads off at this proposal, though they'll like the cutting of race dates and tracks...less gambling competition is cool with the Ontario Liberal Party.

Maybe I'm just stupid, but in OHRIA's recent proposal they seem to be content with the end of Fort Erie. To stupid me, if OHRIA is conceding that racing can exist without Fort Erie, it makes it next to impossible to make a case to the government that Fort Erie Race Track should exist after this year.

Maybe I'm just stupid, but OHRIA seems to believe that Woodbine can race B horses. Sure, they can write $5,000 claiming races, but at a rate of $80 day pay, which owners are going to stick around to fill those races with their horses? There is a very good chance that if Woodbine is the only thoroughbred track running next year, owners of horses who run for less than $12,500 or who can't handle polytrack will send their horses away to Finger Lakes or Ohio. Some may run for the Woodbine owners there, but many will be sold for next to nothing. Once, this happens to an owner once or twice, it will take the fun out of the game, as well as taking away much of the chance that the owner can make money in the game. I know this might sound stupid but owners will dry up very quickly, leaving only wealthy trainers and owners with more money than brains to race. Maybe I'm just stupid, but I would think that OHRIA would understand the economic necessity of having a B racetrack in Ontario.

Maybe I'm just stupid, but Tim Hudak's attempt to appeal to the horse racing community and its supporters, to make sure that the Ontario Liberals don't wind up with a majority government by winning the upcoming Kitchener-Waterloo election, sounds almost pointless. The Liberals didn't need a majority government to end the Slots At Racetracks program. How will a Liberal defeat in Kitchener help horse racing in Ontario?

Maybe I'm just stupid, but the Minister of Agriculture, Ted McMeekin, comes across like a pompous A-hole when he says, “Simply put, the model that is currently in operation and is scheduled to end March 2013 is not viable, is not sustainable.” Is EHealth, ORNGE, moving the Mississauga Power Plant, or full day kindergarten sustainable? Sustainable? The SAR program was a partnership, and it is not going to mean much more money, if any, to the government bottom line, once the new operators (mostly foreign owned conglomerates most likely) take their cut of the slots profits.

Maybe I'm just stupid, but whenever I read that Bingo Halls are going to get a better deal than racetracks did because they are only going to give the government 47% of gross gaming revenues (before expenses to the Bingo Hall), while the government received 75% of slot revenues from Racinos (before expenses to the government), I either believe that the writer either doesn't understand Business 101 or is being totally disingenuous. That being stated, I know I'm stupid for even thinking that Bingo Hall owner Larry Tanenbaum is getting preferential treatment for being a Liberal Government Crony.

Maybe I'm just stupid, but I really like the idea that Finance Minister Dwight Duncan got ambushed by Marty Adler:

What bothers me is when Duncan stated that the number of jobs affected by the end of the SAR program is "not 60,000," Adler didn't come back asking "well then how many jobs will be affected?" Truth is that Duncan has no idea, and that, to a stupid person like me, shows that the decision to end the slots at racetrack program was done without the proper due diligence.

23 July 2012

Here is a video by Joe Scully, a rodeo MC, shot at Fort Erie Race Track:

Many good points are made. This move has economic disaster written all over it. Slots are racetracks partnerships is a winning deal for jobs and the province. It is a program that the USA is following, even where casinos are being allowed for the very first time. Ending the program will have long enduring sweeping consequences.

One thing Scully is wrong about is that there will still be revenues for the municipalities (perhaps not as much), but some will lose them altogether, and some will start seeing them for the first time.

Finally there is some noise about Public Cost Benefit Analysis. This should have been an issue before the budget was voted on, especially after Dwight Duncan doubted the 60,000 jobs number. The fact he doesn't know if it is 10,000, 20,000, or 60,000 proves that this decision was done without due diligence.

I don't know about you, but I've never cared much about Ontario politics. I think Ontario politicians rely on voter apathy. Being a social liberal who believes in separation of church and state, I took a stance a few years ago against John Tory because he wanted to fund religious schools, but other than that I really didn't give a rats butt about politics. Now, I'm becoming fascinated by it, and the more I learn, the more I've become disgusted by the Liberal Party of Ontario. They seem to take deception to brand new levels.

I believe that their ending of slots at racetracks program will kill the party in the future. They won't be able to overcome losing many voters for life. Politicians like Kim Craitor are done if Fort Erie does close. He couldn't even get Fort Erie a gaming zone. If I were him, I'd cross the floor ASAP.

The Liberals aren't only to blame for this. They only have a minority government, Tim Hudak has not come out and stated what he would have done, or what can be done to rectify things, and the issue wasn't important enough to Andrea Horwath to either vote against the budget or demand a Cost Benefit study first.

I really don't know what is going to happen in the end here, but I'm not very optimistic, despite the 3 man committee, the Ontario Ombudsman and the work of Dennis Mills (Racing Future). I can't see the corrupt Ontario Liberal government bending, but I hope I'm wrong.

15 July 2012

There really is no optimism going on regarding a 2013 season at Fort Erie. However, I don't think there is anyone who believes that the fight to stay open is over either. In fact, the whole horse racing industry in Ontario still are clinging on hope that the decision to end the slots at racetrack program will be overturned. It isn't like the current clowns who are running Ontario into the ground haven't done about faces before (but usually for political gain only) Take the cancelled Mississauga power plant, which will cost Ontario tax payers over $180 million for example. That about face was all about saving Liberal Party of Ontario seats, the problem with the slots program is that even if the Liberal Party were to reverse the decision, they would not be able to gain any future votes out of it. They've lost many votes for life over the decision to end slots. I still believe that either way, there are going to be a lot more large embarrassment in store for the Liberal Party when the Ontario Ombudsman starts blowing the whistle.

Back to Fort Erie. The track was already on life support before the announcement to end slots was made. I believe the only hope for The Fort is if a new buyer comes along and without slots or other forms of gambling, the likelihood is very remote. It does have the possibility to become a training centre, but with the anti-horse racing minority government that is in place, there is a major possibility that too much harm will occur and a never go back situation may result.

At this time, I can't see the track being plowed down to rubble either. It costs money to do that, and upon losing its number one employer, Fort Erie industrial or residential land won't be sought after when it comes to new developments. So there is a possibility that Fort Erie will stand empty until the next election, when hopefully, the new government will come in and help reopen the joint.

Anyway, it is a shame that a minority government can come in and kill an industry. It is hard not to blame the other parties for allowing it to happen, but the reality is that neither cared enough to make it a worthwhile issue.

Interesting that back then a jockey, Robert Wankmueller, was arrested for defrauding the public. Imagine that? When did the rules change that defrauding the public by trainers now results in a $300 fine and/or a warning?

Handicapping Time:

I threw some mud against the wall this morning, in an attempt to find the Prince Of Wales winner. I like Dixie Strike. She came back nicely to run a decent troubled and wide third in the Queen's Plate. I think the switch from poly to will not bother her as much as some of the others in the field. My long shot contender is Ultimate Destiny, a horse who seems to be peaking. You can't discount the bottom horse either, Roger Attfield trained Colleen's Sailor. Corey Nakatani must have felt some potential in the Plate for him to take another plane ride and dust off his passport for the Prince of Wales. As for the probable favorite, Irish Mission, her breeding screams out grass and poly, she has also run quite a few good races in a row. Breeding and bounce factor and lack of betting value makes her a very good pitch this afternoon.

Though Watchmaker brings up good points, like the stands have always been full of older people, which, because of the lack of younger people in the crowd, leads to the false conclusion that when the older players die, it is over for horse racing. The reason this wasn't true in the past is that 45 year olds and up have more disposable cash and more time to finally embrace the game that hooked them when they were younger.

Watchmaker doesn't address why things might be different this time around: A much smaller amount of the new 45 year olds today were bitten by the race track bug at an earlier age, and going forward the percentages will even be smaller.

A brief history is needed to explain this. Back in the 60's, horse racing was mainstream, many sitcoms on TV had at least one episode devoted to a racetrack theme. Outside of Vegas, it was the only game in town. You had to go to the track, or by the early 70's an OTB, to place a bet (except for those who played with bookies, but even these players went to the track often). The stands were packed, not only with 45 plusers who were regulars but their kids as well. The Horseplayers were limited to WPS bets most races, as there was maybe one double and a couple of exactors tops for a typical card of racing.

The fact that WPS wagers were predominant meant that collective takeout back then was in the 15-16% range, which meant more churn, and more gambling satisfaction as a limited 8 race card ensured that most patron would leave the track with at least some money, which for a gambler lead to one thing: Looking forward to the next day that the track was open and/or the next day they can make it to the track....and who needs to pay for a babysitter when you could bring your kid in for free.

The game was beatable by a few too back then. Those who made their own track variants had a huge edge (this was taken away gradually, as the DRF provided some archaic variants culminating in 1990 when Beyer figs were in every Form). There were visible winners, thanks in part to a lot of dummy money, as there was pretty much no other gambling competition, which meant that there was a lot of money in the pool that came from guessers (only 1 in 4 or 1 in 5 players actually bought the Form).

The 70's came along and so did lotteries and also a lot of sports franchises began to pop up. The Toronto Blue Jays had a noticeable negative affect on the attendance numbers at Woodbine, especially on weekends. Dummy money was still out there, but exotics started to become available in every race, and this drove up the collective track takeout and it reduced churn as well. Players were going home with less money, and they also needed a bigger bankroll to enjoy the card. This weeded out a few more, and stands started to see a drop off in kids (today's 45 year olds).

The 80's saw even more exotic wagers, collective takeout continued to creep upwards, and intertrack wagering came into play. You didn't have to go to the live venue to place a bet. It is very tough for a regular to bring a kid to an intertrack without looking like a complete degenerate. Kids could not have any fun in that setting, it is light years away from the live racing experience. Still, kids became scarce at racetracks, as gamblers were starting to go broke much faster, as they now had a lot more races and betting types to play on any giving day. Horse racing had more plays an hour, the takeout should have dropped in the direction of blackjack and slots, but went the other way instead.

With the 90's came Charity and Indian Casinos. More bang for the buck for gamblers, as casino games have much lower holds. Handicappers were starting to get discouraged as dummy money started disappearing quickly, it was good handicappers versus good and great handicappers. The playing field was equalized too with the track variant adjusted speed figure. Horseplayers were losing more quickly, many didn't realize why, but enjoyment started to drop, however, the fact that more tracks were available meant that those who did play, played with a bigger bankroll. Lets not forget that those who were playing in the 90's, were mostly got the needle in their arm as a kid in the 50's to early 70's. However, there were less and less visible winners as the Century turned.

In the early 2000's, there was still a nice spike up as the majority of people in Canada and the USA could now play at local restaurants, intertrack locations, and finally from home. Except for those who reside in States like Arizona and Texas, a Horseplayer can now pretty much play a race from anywhere anytime. If Watchmaker's 45 year old theory is true, handle should be soaring today. It is not.

Is it the economy or increased competition? Vegas should be a good barometer as competition from all other locations and a bad economy should mean that Vegas would have experienced a drop off as well. Wrong.

In real money terms though, Vegas is off, as inflation rose 26% from 2000-2010. But again, with more and more casinos popping up across American, they still fared quite well.

So lets look at horse racing one more time from the angle of 45 year olds or greater. Handle in 2000 was 15 Billion, multiply that by the Vegas increase which takes into account inflation minus competition and the bad economy (11%), and multiply that by the increase in population for those demographics (31.5%). Horse racing handle should be hovering around $21.9 Billion instead of $11.5 Billion.

The game is dying. Increased takeout caused by actual hikes to a shift in higher takeout wagers available is a main cause. Another cause is the increase in signal fees that ADWs have been seeing of late, cutting into rebates available to every day players, which creates less churn. Also, protectionism from signal hogs, to States not allowing internet wagering, to States that have implemented home market fees, have all added to less churn and have turned many existing Horseplayers to give up on horse racing.

But the main reason is a diminishing amount of today's 45 year old, as they were not weaned on horse racing. And because of that, it is hard to convince them to play a game that nobody beats long term, and that has a very big learning curve. Why learn a game that is perceived to be unbeatable?, when there are games like poker that are perceived to be beatable by a few, the same is true of sports wagering, and to a lesser extent, blackjack which has a very low house edge.

It isn't over for horse racing, but there needs to be visible winners created.

Takeout needs to reduced to the 15-16% percent range by all tracks, and if this is successful, further drops need to be made. Until that happens, rebates for all needs to be embraced by the industry.

Low takeout Pick 5's don't work. It doesn't create churn, it doesn't attract new bettors. The same is true about Jackpot bets. If a Jackpot bet can't get new people right from the start, all it does is take a lot of churn money out of the bettor's hands.

Exchange wagering needs to be a reality. Getting families to go to the track as regulars is a dead deal. Horse racing needs to get with the times. The only way to cultivate the 20-35 year old crowd is to give them a high churn fix, one that some can actually win at, which will create a buzz.

In the meantime, a nation wide lottery type bet (a Pick 9) similar to the V75, that is available to be bet at lottery kiosks and every track and ADW, will certainly help get more horse racing exposure from 45 year old plusers.

The time has come to let the market decide the price of the bet, not the Horsemen or self serving Racetrack owners, if racing is to grow.